ACCC v Lux Distributors: what is unconscionable conduct?

In Australian Competition and Consumer Commission v Lux Distributors Pty Ltd [2013] FCAFC 90 the Federal Court Full Court declared that in selling its vacuum cleaners Lux engaged in conduct that was unconscionable in contravention of section 21 of the Australian Consumer Law.

Lux’s sales telephone script called for its representatives to arrange to attend at elderly women’s homes for the purpose of making “a free maintenance check” on the householder’s existing vacuum cleaner. When a representative arrived he would not tell the homeowner that he was there to sell a vacuum cleaner. The sales presentation lasted more than 1 1/2 hours with the goal of pressuring customers to buy expensive products.

The Australian Consumer Law has no definition of unconscionable conduct.

In the context of “unsolicited consumer agreements” (door to door sales) the court decided that “The word “unconscionability” means something not done in good conscience” and the purpose of the section is “consumer protection directed at the requirements of honest and fair conduct free of deception. Notions of justice and fairness are central, as are vulnerability, advantage and honesty.”

It concluded:
“The task of the Court is the evaluation of the facts by reference to a normative standard of conscience. That normative standard is permeated with accepted and acceptable community values. …. Here, however, they can be seen to be honesty and fairness in the dealing with consumers. …These laws of the States and the operative provisions of the ACL reinforce the recognised societal values and expectations that consumers will be dealt with honestly, fairly and without deception or unfair pressure. These considerations are central to the evaluation of the facts by reference to the operative norm of required conscionable conduct.”

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